Justia Banking Opinion Summaries

In 2004 Wallace financed a home purchase with a $272,315 mortgage. He took a second mortgage of $164,500 for improvements and to pay down debt. In 2006, Wallace sought a refinance loan of $422,500. Midwest obtained an appraisal from Brock, through the now-defunct Accupraise. A former Accupraise employee explained that Midwest would send a requested appraisal value and Brock would return a tailor-made appraisal, often without seeing the property. Accupraise and Brock valued Wallace’s home at $500,000. Unbeknownst to Wallace, his refinance was an adjustable-rate mortgage that allows negative amortization; he had a teaser rate of two percent that quickly multiplied. For securing a high long-term interest rate, Midwest received a premium in excess of $14,000. The loan created insurmountable financial problems for Wallace. He learned that the true 2006 value of his home was $375,000. Wallace declared bankruptcy, surrendered the home, and sued alleging that he was the victim of a fraudulent scheme violating the Racketeer Influenced and Corrupt Organizations Act and Kentucky conspiracy law. Mediation produced a settlement, under which Wallace prevailed on a RESPA claim. The district court granted defendants partial summary judgment. The Sixth Circuit reversed a finding that Wallace did not sufficiently demonstrate that the appraisal proximately caused his financial injuries, but otherwise affirmed. View "Wallace v. Midwest Fin. & Mortg. Servs., Inc." on Justia Law

Appellants purchased nonrecourse notes (Notes) in the amount of two million dollars, issued by the Puerto Rico Conservation Trust Fund (PRCTF). The Notes were not registered under the Securities Act based on an exemption from registration. The Notes later went into default, and Appellants sued Banco Popular de Puerto Rico (BPPR), trustee of the Notes, and Wilmington Trust Company (WTC), indenture trustee of the securities that the PRCTF purchased with Note proceeds. Appellants brought their suit in federal district court, premising their assertion of subject matter jurisdiction on the Edge Act and the Trust Indenture Act of 1939 (TIA). The district court dismissed the amended complaint for want of subject matter jurisdiction. The First Circuit Court of Appeals affirmed, holding that Appellants' suit did not arise under federal law. View "Calderon-Serra v. Wilmington Trust Co." on Justia Law

Plaintiffs filed suit against Wells Fargo after plaintiffs' application for a mortgage modification under the Home Affordable Modification Program (HAMP) was denied. The district court concluded that plaintiffs had failed to state a claim upon which relief could be granted and therefore granted Wells Fargo's motion to dismiss. The court concluded that plaintiffs have not plausibly stated a breach of contract claim; plaintiffs' negligence claim failed because there was no express or implied contract and therefore, no tort duty could arise as a matter of law; plaintiffs' Maryland Consumer Protection Act, Md. Code Ann., Com. Law 13-301(1), claim failed because Wells Fargo did not make misrepresentations when it stated that it needed more information to process plaintiffs' HAMP application; and the district court court properly dismissed the negligent misrepresentation and common law fraud claim. Accordingly, the court affirmed the judgment. View "Spaulding v. Wells Fargo Bank, N.A." on Justia Law

Plaintiffs appeal from the district court's order denying their motion for remand to state courts. This is an interlocutory appeal of a question certified by the district court, calling for interpretation of the jurisdictional provisions of the Edge Act, 12 U.S.C. 632. Whether the district court's denial of remand was proper turns on whether the dispute falls within section 632. The court concluded that the dispute did not fall within section 632's grant of jurisdiction so that removal from state to federal court was not authorized by the statute. Therefore, the court vacated the district court's order denying remand. View "AIG v. Bank of America" on Justia Law

Developers purchased forty acres with the intent to develop it. Appellants secured a mortgage on the property with a bank. Later Developers formed a municipal property owners' district (the District). Law Firm was retained by the District as legal counsel for the proposed issuance of improvement bonds to finance public improvements in the development. At issue in this case were certain bonds issued by the District that were sold to several banks (Appellants). Developer defaulted on payment of the capital improvement use fees on the bonds and subsequently defaulted on the original mortgage, and the property was sold. Appellants sued Law Firm, alleging that Law Firm had a duty to inform Appellants of the mortgage on the real property and that it failed to inform them. The circuit court granted summary judgment for Law Firm. The Supreme Court affirmed in part and reversed and remanded in part, holding that the circuit court (1) correctly found Law Firm was not liable under the Arkansas Security Act; (2) erred in granting judgment on the issue of attorney malpractice; and (3) correctly found Law Firm had no duty to Appellants under contract, negligence, or breach of a fiduciary duty. View "First Ark. Bank & Trust v. Gill Elrod Ragon Owen & Sherman, P.A." on Justia Law

Based on a mortgage fraud scheme that caused the U.S. Department of Housing and Urban Development (HUD) to insure loans for unqualified applicants based upon forged documents and false information provided by Wendlandt, he pled guilty to one count of conspiracy to defraud the United States, 18 U.S.C. 371, and was sentenced to 42 months in prison. The Sixth Circuit affirmed, rejecting challenges to the district court’s computation of financial loss for purposes of determining his offense level under U.S.S.G. 2B1.1 and to the court’s decision to vary upward from the advisory Guidelines range of 24 to months in prison. View "United States v. Wendlandt" on Justia Law

1st Fidelity Loan Servicing initiated a foreclosure by advertisement to collect the debt secured by a mortgage on the home of Respondent. 1st Fidelity subsequently purchased the property at the foreclosure sale. Respondent filed a complaint seeking a declaration that the sale was null and void and the recovery of monetary damages, alleging that 1st Fidelity failed to comply with certain statutory requirements. The district court granted summary judgment in favor of 1st Fidelity on the ground that it had substantially complied with the relevant statutes. The court of appeals reversed, concluding that Minnesota's foreclosure by advertisement statute requires strict compliance and that a foreclosing party's failure to strictly comply renders the foreclosure void. The Supreme Court affirmed, holding (1) a party must strictly comply with Minn. Stat. 580.02(3), which requires that all assignments of a mortgage be recorded before a party is entitled to make a foreclosure by advertisement; and (2) because 1st Fidelity did not strictly comply with section 580.02(3), the foreclosure was void. Remanded. View "Ruiz v. 1st Fidelity Loan Servicing, LLC " on Justia Law

Debtor filed for leave to appeal the bankruptcy court's interlocutory judgment in the district court. While the motion was pending, the bankruptcy court, sua sponte, certified its judgment for direct appeal to this court, pursuant to 28 U.S.C. 158(d)(2)(A)(i) and (iii). The court agreed with the bankruptcy court's ruling on cross-motions for partial summary judgment in favor of FGB that the Multiple Indebtedness Mortgage that FGB recorded was valid and that the property underlying that mortgage, the Deluxe Motel, secured both the loan FGB made to debtor and the loan FGB made to a second entity. Accordingly, the court affirmed the judgment and remanded for further proceedings. View "Hari Aum, L.L.C. v. First Guaranty Bank" on Justia Law

This case arose out of several business transactions entered into by parties involved in the development of condominiums on Hauser Lake. Cherrad, Merritt & Marie, and Max & V (the Hale interests) were limited liability companies owned by Conrad and Cheryl Hale. Craig Kinnaman was sole proprietor of a business called CK Design. Merritt & Marie purchased the Hauser Lake property. Subsequently, the Hales and Kinnaman agreed to develop a portion of the property. Cherrad was the developer, and Mountain West Bank (MWB) made three loans to Cherrad to develop the project. CK Design suffered delays in the project and later left the project. In 2007, Kinnaman committed suicide, and the Estate recorded a $3.3 million construction lien on the condominiums. MWB brought this action 2008 against the Hale interests and the Estate seeking foreclosure on the three secured loans. The Hale interests and the Estate cross-claimed against each other. The district court (1) declared the Estate's construction lien invalid; and (2) determined Cherrad owed the Estate $76,278 for work that CK Design performed on the project. Finding no error, the Supreme Court affirmed. View "Mountain West Bank, N.A. v. Cherrad, LLC" on Justia Law

Mortgage Electronic Registration Systems, as nominee for two lenders (collectively, Plaintiffs), held mortgages on Lot 456. For the property owner's failure to pay his water bill, the Pawtucket Water Supply Board (PWSB) auctioned the lot. PWSB issued a deed conveying the title in the property to Amy Realty. Amy Realty subsequently discovered that the property PWSB had intended to auction had been mistakenly listed as Lot 486 on the tax sale notices and deed. Amy Realty then obtained a corrective deed from the PWSB conveying title to Lot 456. Amy Realty subsequently filed a petition to foreclose on Plaintiffs' rights of redemption in Lot 456. Plaintiffs filed this action seeking to vacate the final decree of disclosure, alleging that the corrective deed changing the lot number from 486 to 456 was invalid and this infirmity rendered the foreclosure decree void. The superior court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding (1) the corrective deed obtained in this case was null and void because it was not recorded within sixty days of the tax sale; and (2) the final foreclosure decree may be vacated because the tax sale was invalid. View "Mortgage Elec. Registration Sys., Inc. v. DePina" on Justia Law